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Investing In Our Community’s Future With Social Loans

7 JULY 2014

 

Building a new house is a big financial investment – so when you’re trying to build 14 of them to house some of society’s most vulnerable people, you need strong financial backing.

The Tauranga Community Housing Trust is about to transform the lives of dozens of people when they open their Clarke St housing development in November 2014.

The ambitious project has been years in the planning, and Trust manager Chris Johnstone says it wouldn’t have gotten off the ground if it wasn’t for a ‘social loan’ from BayTrust.

“They approved in principal a loan up to $1 million. That enabled us to then leverage another $1.7m from central government. BayTrust was effectively the first domino and without them this project wouldn’t have gone ahead.”

BayTrust’s ‘social loan’ will be drawn down before the project’s completion, and will have a lower interest rate than that charged by commercial banks.

“This is a social housing project so we will only be charging tenants social rents,” Chris explains (around 15 to 20 per cent less than market rents).

“So it is even more challenging to make it stack up financially and get the project off the ground.”

Clarke St ideal site

The new housing development is near Tauranga Hospital and is handy to shops, public transport and other community services.

Eight one-bedroom units and six two-bedroom units have been designed as part of an “age friendly” village where those in wheelchairs or using mobility scooters can easily be accommodated.

“Tauranga is one of the least affordable cities to live in,” Chris says. “We are seeing an increasing number of older people every year who need our help. As well as our aging population, a lot of people now need assistance because they can’t find something suitable or affordable in the private rental market.”

Construction is currently underway on the 2500sq m site and appropriate tenants will be chosen from Tauranga Community Housing Trust’s client list later this year.

Good housing transforms lives

Chris says social housing projects such as this one provide stability and security so people can enjoy better health, employment, education and training outcomes.

“Of those people that TCHT has, and will continue to work with, most have complex health, disability, financial and/or social needs in addition to a serious housing need,” she says.

Potential tenants often face discrimination a number of barriers when trying to rent a home such as poor literacy and communication skills, high debt levels and physical disabilities.

The Tauranga Community Housing Trust hopes this development will create greater publicity around the need for quality affordable housing in the Bay of Plenty.

“Although the population of Tauranga and the Western Bay of Plenty now exceeds 130,000 there is minimal crisis, transitional, community and social housing.

“This is a great site and these new homes will make a big difference to people’s lives.”